November 12, 2008

Governor Paterson, assisted by Budget Director Laura Aglin, today gave broad outlines for the Deficit Reduction Plan he’ll put before the November 18 special session of the legislature. They involve education, health care, SUNY and CUNY tuition, and civil service. If enacted, the Governor says, they would save $2 billion this year, $3.2 the next.

This year’s rate of growth for school aid, originally projected at nine percent, Paterson proposes to cut to five percent. Health care/Medicaid growth would be cut from two to one percent.

The state would take $800 million from school districts on a case-by-case basis, with “high-needs” districts seeing lower reductions — three percent, as opposed to nine percent seen by “low-needs” districts.

Health care reductions would be seen in hospitals, nursing, home care, pharmaceuticals, and medicaid reimbursement rates.

SUNY and CUNY tuition would be raised $600 a year. And state civil service unions would be asked for givebacks — for example, to defer five days of salary in the fiscal year that employees would get back when they retire. Future retirement benefits may also be trimmed.

Paterson said layoffs aren’t being considered now, but if he can’t get sufficient movement on state employment costs, New York may lose more workers than previously planned “through attrition.”

The Governor and Anglin also proposed reductions in the legislature’s programs, closure of “vacant” youth facilities, and changes to the bottle bill.

The Governor says that as “New Yorkers are leaving the state” because of its tax burdens, he wants to avoid raising taxes if at all possible, though he did ay that, in the long term, he’d like to collect taxes from New York’s Indian reservations.

Paterson reminded reporters that during the fat years of the 1990s and the early part of this decade, “we never stopped spending” and ran up deficits which now necessitate these “difficult” cuts.